Research by Asoko Insight and Africa Capital Digest reveals that there currently about 207 private equity investment firms in Sub-Saharan Africa.
These include Brait, Development Partners International, Helios Investment and Old Mutual Capital.
There are also about 8 firms managing funds between $500 million and $1 billion. Furthermore, there are 60 firms with funds between $100 million to $500 million under management within Sub-Saharan Africa. However, a large portion of firms in the region, about 71, manage funds less than $100 million.
According to the report, South Africa remains the main target for the equity firms because of its “relative stability” and friendliness to foreign investors. The country accounts for about 39% of the total offices set up by the investment firms. Kenya is second with 14% while Nigeria comes third with 13%.
The financial services sector is the most prominent area of focus for investment from these firms, then the consumer space. Healthcare, agribusiness, and the technology sectors also attract prominent investments.
According to the report, “US fast food giant Burger King is one of the multinationals also looking to expand its wings into Sub Saharan Africa. Burger King believes it is under-penetrated in a continent with huge opportunities and potential.
Development Partners International, one of the biggest investors in Sub-Saharan Africa with over $1 billion of funds under management, has diversified its investment portfolio, directing its funds into consumer services, education, healthcare, and the financial sector.
The report adds that Emerging Capital Partners, another firm with over $1 billion of funds under management, is focusing on consumer services, finance, and infrastructure as part of its investment strategy in the region. The equity firm has also directed substantial investments to industrial, manufacturing as well as technology. Métier, a firm with over $500 million of funds under management, appears to be paying more attention to agribusiness, consumer and education sector.